“We have a dedicated startup fund worth Rs 25 crore which we would like to use to fund or lend to promising startups,” said Shyam Srinivasan, MD.Pratik Bhakta | ET Bureau | March 26, 2016, 10:05 IST

"We have a dedicated startup fund worth Rs 25 crore which we would like to use to fund or lend to promising startups," said Shyam Srinivasan, MD.Kerala-based private sector lender Federal Bank is opening incubation centres for startups in Bangalore and Ernakulam. These specialised lounges in the bank's branches will offer advice on capital, regulatory support and even disburse funds.

"We have a dedicated startup fund worth Rs 25 crore which we would like to use to fund or lend to promising startups," said Shyam Srinivasan, managing director of Federal Bank. "These lounges, named Launchpad - with fast internet connections, support staff from the financial world and advisory mechanisms - would be the perfect breeding ground for future entrepreneurs."

The lounges would be manned by bank executives capable of dealing with the financial requirements of startups as well as local specialists who would be able to advise on regulatory issues.

"We are talking to three or four startups daily. The challenge for a bank is to move away from a conservative credit mindset to a more entrepreneurial mindset and to accept the fact that out of 40 or 50 investments, only one might take off. So, even we are in the process of understanding how to engage with startups better," he said.

The bank is also mirroring HDFC Bank and SBI in integrating its platform with mobile payments application 'Chillr'. The addition that Federal Bank brings to the 'Chillr' application is that they would allow even non-Federal Bank users to instantly open a Federal Bank account through a selfie and an 'Aadhaar' identification number and allow them to receive payments through 'Chillr'.

"This is just another offer in the suite of offerings for customers. We are in the major discovery process and slowly there would be convergence in this field," said Srinivasan.